State Consumer Disputes Redressal Commission
M/S India First Life Insurance Co. vs Kawaljit Kaur on 20 July, 2017
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
First Appeal No.46 of 2017
Date of Institution : 20.01.2017
Order Reserved on: 17.07.2017
Date of Decision : 20.07.2017
M/s India First Life Insurance Co. Ltd., 301, B Wing, The Qube,
Infinity IT Park, Dindoshi Film city Road, Malad East, Mumbai-
400097.
.....Appellant/opposite party nos.2 & 3
Versus
1. Kawaljit Kaur W/o Late Prabhjot Singh R/o Opposite Guru
Nanak Dev Academy Jallandhar Road Batala.
.....Respondent no.1/complainant
2. Banks of Baroda, Represented by its Branch Manager, Branch
Office at G.T. Road, Batala.
.....Respondent no.2/opposite party no.1
First Appeal against order dated
24.11.2016 passed by the District
Consumer Disputes Redressal Forum,
Gurdaspur.
Quorum:-
Shri J. S. Klar, Presiding Judicial Member.
Smt. Surinder Pal Kaur, Member Present:-
For the appellant : Sh. Vaibhav Jain, Advocate For respondent no.1 : Sh. Hardeep Singh, Advocate For respondent no.2 : Ms. Manjari Joshi, Advocate ............................................
J.S KLAR, PRESIDING JUDICIAL MEMBER :-
Challenge in this appeal by appellant is to order dated 24.11.2016 of District Consumer Disputes Redressal Forum Gurdaspur (in short the 'District Forum) directing the appellant to settle and pay the insurance claim, as per the governing terms of the applicable insurance policy (to its full benefits), but strictly in accordance with the IRDA guidelines on 'settlement of claims' to OP First Appeal No.46 of 2017 2 no.1 Bank for appropriation as directed hereinabove, besides to pay Rs.10,000/- to complainant as cost and compensation. Respondent no.1 of this appeal is complainant in the complaint before the District Forum, respondent no.2 of this appeal is opposite party no.1 therein and appellant of this appeal is opposite party nos.2 & 3 therein and they be referred as such herein after for the sake of convenience.
2. The complainant instituted complaint U/s 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the OPs on the premise that she is widow of late Prabhjot Singh. It was averred that her husband had availed a Housing Loan of Rs.9,00,000/- from OP no.1 on 24.12.2009, vide loan account no.12580600011968. As required by the official of the bank/OP No.1, her husband executed certain loan documents and her signatures were also obtained by the officials of the OP no.1 on certain loan documents. It was further averred that OP no.1 has tie up with OP nos.2 and 3 and the Branch Manager of OP no.1 suggested her husband to take insurance policy under Master Policy of Group Credit life plan by depositing an amount of Rs.19,000/- as premium of the said policy, under single premium paying terms and it was told to them that in case of the death of her husband, the remaining balance amount of the loan would be waived off. Her husband had paid the above said amount against the said policy and the same has been debited from his account and credited in the account of the OP nos.2 and 3. It was further averred that after availing the above loan, her husband repaid the monthly installments of the said loan, but unfortunately her husband died on 07.02.2013. First Appeal No.46 of 2017 3 It was further averred that after the death of her husband, she moved an application to OP no.1 on 28.09.2013 for making payment of death claim of the said policy, vide death claim no.00002820, master policy no.G0000013/Life Insured Prabhjot Singh Member No.07932 and submitted all the documents to OP no.1. OP no.2 sent intimation regarding receiving of above death claim on 24.04.2013. Vide application dated 24.4.2013, OP demanded some documents, which were duly supplied by her. OP nos.2 and 3 repudiated the claim, vide its letter dated 15.05.2013 on the ground that her husband was suffering from liver disease and diabetes, but her husband was all right and he never availed any medical leave. She approached OP no.1 so many times, vide applications dated 08.07.2013, 28.09.2013 and 04.11.2013 for the settlement of the death claim of her husband, which were forwarded by OP no.1 to OP no.3, vide letter dated 3.10.2013, but nothing was done by OP no.3. Vide letter dated 06.11.2013, OP no.1 requested OP no.3 for settlement of the claim and an intimation was also sent to her. Under the compelling circumstances, she has been paying the installment of the loan amounting to Rs.8703/- approximately, since the date of disbursement till date, whereas OP no.1 with malafide intention and with the connivance of OP nos.2 and 3 has been receiving the amount of loan alongwith interest after her husband's death. She paid Rs.4,98,455/- till today against the same, though she was legally not liable to pay the same. She alleged deficiency in service on the part of the OPs. She prayed that OP nos.2 and 3 be directed to pay the amount of the insurance policy regarding the death claim First Appeal No.46 of 2017 4 of her husband alongwith interest @18% per annum from the date of submitting the claim form; further to refund her the extra amount deposited by her after death of her husband; to pay Rs.2,00,000/- as compensation for unfair trade practice and for harassment.
3. Upon notice, OP no.1 appeared and filed separate written reply raising preliminary objections that the complaint is not maintainable against OP no.1 bank of Baroda, as there is no privity of contract between the complainant and OP bank. The complaint is bad for non joinder and misjoinder of necessary parties. On merits, it was averred that husband of the complainant Prabhjot Singh and the complainant had signed the loan documents, as both are the borrower of the bank and the bank account is joint of both the borrowers. It was admitted that the husband of the complainant took the insurance policy under master policy of the group credit life plan by depositing the insurance premium and the insurance premium of the policy was debited from the account of the husband of the complainant and credited in the account of OP nos.2 and 3. The complainant moved an application to answering OP for lodging the death claim with OP nos.2 and 3. The claim of the complainant was referred to OP nos.2 and 3 and all the letters of the complainant regarding the settlement of the said claim received by the answering OP, were also forwarded to OP nos.2 and 3. It was admitted that complainant is paying the installments of loan amount to it. OP no.1 controverted the other averments of the complainant, as pleaded in the complaint. OP no.1 denied any deficiency in service or unfair trade practice on its part and prayed for dismissal of the complaint. First Appeal No.46 of 2017 5
4. Upon notice, OP nos.2 and 3 appeared and filed their joint written reply raising preliminary objections that complaint is an abuse of process of law. The policy was taken by DLA by furnishing false information. It was averred that after understanding all the terms and conditions of the Policy, Mr.Prabhjot Singh DLA submitted the duly signed Declaration of good health on 23.03.2012, under Master Policy No.G0000013 and loan account no.12580600011968 giving all relevant details and information in the prescribed form for a sum assured of Rs.9,80,000/-. Thereafter, based on the information provided and declaration made in the declaration of good health and on receipt of the premium, membership no.07932 under Master Policy no.G0000013 was issued to the DLA having the date of risk commencement as 23.03.2012. It was further averred that claim filed by complainant, being an early claim and after perusal of the documents submitted by the complainant, OPs got an investigation done through Transparent World and independent Investigation agency. After the perusal of the documents provided by the complainant and procured during the investigation, OPs came to know the medical treatment record of DLA issued by Medanta medicity Hospital at Gurgaon, that DLA was having a premedical history of ethanal (Alcohol) related liver disease since last 10 years. He was diagnosed with Jaundice in October 2011 and Liver Cirrhosis in January 2012. He was admitted thereat. He was on treatment for the same and undergone Banding ligation procedure for esophageal varices on 27.092012. As per the medical record, DLA had undergone medical investigation on 23.10.2011 and on First Appeal No.46 of 2017 6 27.09.2012, which confirmed the diagnosis of Liver Cirrhosis with Esophageal varices and pulmonary hypertension. They further came to know that he was also known case of diabetes since last three years. DLA did not disclose about his pre-medical history in the column of Declaration of Good Health. The DLA was taking treatment of above mentioned diseases prior to signing of the declaration of good health form and these facts were concealed by DLA at the time of issuance of the insurance policy. The deceased Life Assured had not disclosed about his past medical history, which was material for OPs, therefore, they repudiated the claim of complainant under Section 45 of the Insurance Act and same was also intimated to the complainant, vide repudiation letter dated 15.05.2013. They controverted the other averments of the complainant, as raised in the complaint by denying any deficiency in service and unfair trade practice on their part. OPs prayed for dismissal of the complaint.
5. Complainant tendered in evidence her affidavit Ex.CW1/A, alongwith other documents Ex.C2 to Ex.C17 and closed the evidence. As against it, OP no.1 tendered in evidence affidavit of Sh.Ashok Kumar Ranwat, Ex.OP-1/1 and closed the evidence. OP nos.2 and 3 tendered in evidence affidavit of K.R.Viswanarayan working as Head Governance and Company Secretary of India Ex.OP-2,3/1, alongwith other documents Ex.OP-2,3/2 to Ex.OP-2,3/9 and closed the evidence. On conclusion of evidence and arguments, the District Forum accepted the complaint of the complainant as First Appeal No.46 of 2017 7 referred to above. Aggrieved by above order, OP nos.2 and 3 now appellant has directed this appeal against the same.
6. We have heard the learned counsel for the parties at considerable length and have also examined the record of the case. Evidence on the record has also been adverted to by us with the aid of counsel for the parties. Affidavit of complainant is Ex.CW-1/A in support of her averments on the record. She has proved the documents Ex.C-1 to Ex.C-17 on the record. Ex.C-1 is the letter of OP no.1 bank to the Sub Registrar, Batala regarding application for making for lien of Bank of Baroda, G.T. Road Batala. Ex.C-2 is the certificate of insurance in the name of Prabhjot Singh DLA. Ex.C-3 is the statement of account of complainant and Prabhjot Singh DLA, showing the payment of loan instalments. Ex.C-4 is the death certificate of DLA Prabhjot Singh. Ex.C-5 is letter to complainant regarding receiving the death claim form alongwith documents. Ex.C-7 is the request for settlement of insurance claim. Ex.C-8 is the repudiation letter by OP nos.2 and 3 to complainant. Ex.C-9 is the status report of policy. Ex.C-10 is the certificate of doctor of Prabh Simran Hospital Batala regarding fracture of Prabhjot Singh DLA. Ex.C-11 is the letter from Medical Officer ESI Dispensary Batala to OP regarding leave application of Prabhjot Singh DLA. Ex.C-13 to C-16 are the requests for settlement of claim by complainant to OP.
7. Counsel for OP nos.2 and 3, now appellant seriously contested the order passed by the District Forum in this case. Affidavit of K.R. Viswanarayan, Head-Governance & Company Secretary is Ex.OP2,3/1 on the record. He stated that Prabhjot Singh First Appeal No.46 of 2017 8 DLA took Group Master policy through OP no.1. This witness testified that DLA filled in the proposal form by understanding it thoroughly. He further stated that he also made declaration of his good health, vide Ex.OP2,3/2. Question no.7 was fielded to him to get information if he had suffered from or ever had any medical ailment i.e. diabetes, high blood pressure, cancer, respiratory disease (including asthma), kidney or liver disease, stroke, any blood disorder, heart problem? He gave answer in negative to this question. He also proved master policy documents Ex.OP 2,3/3 and ExOP 2,3/4. He testified that death claim form alongwith documents was received, vide Ex.OP 2,3/5. This witness proved medical treatment record of DLA issued by Medanta the Medicity Hospital at Gurgaon, vide Ex.OP2,3,/6 to the effect that DLA had history of ethanol (Alcohol) related liver disease since last 10 years. He was diagnosed with Jaundice in October 2011 and Liver Cirrhosis in January 2012. He was admitted thereat. He was on treatment for the same and undergone banding ligation procedure for esophageal varices on 27.09.2012. As per the medical record, DLA had undergone medical investigation on 23.10.2011 and 27.09.2012, which confirmed the diagnosis of Liver Cirrhosis with Esophageal varices and pulmonary hypertension. He was also known case of diabetes since last three years. He further proved affidavit of investigator and his report vide Ex.OP 2,3/7 and Ex.OP 2,3/8. This witness further testified that OP nos.2 and 3 are justified in repudiating the contract of insurance under Section 45 of Insurance Act, 1938. Prabhjot Singh DLA made declaration of good health vide First Appeal No.46 of 2017 9 Ex.OP 2,3/2. Question no.7 was fielded to him to get information whether he had suffered from any medical ailments e.g. diabetes, high blood pressure, cancer, respiratory disease (including asthma), kidney or liver disease, stroke, any blood disorder, heart problems? DLA gave specific answer to question no.7 in negative. OP proved vide Ex.OP2,3/6, the medical treatment record of DLA issued by Medanta, The medicity hospital at Gurgaon to the effect that DLA was having pre-medical history of ethanol (Alcohol) related liver disease since last 10 years. He was diagnosed with Jaundice in October 2011 and Liver Cirrhosis in January 2012. He was admitted thereat and found to be a patient of liver cirrhosis. He was on treatment for the same and undergone banding ligation procedure for esophageal varices on 27.09.2012. He was alcoholic with bottle a day for the last 12 years. As per the medical record, DLA had undergone medical investigation on 23.10.2011 and 27.09.2012, which confirmed the diagnosis of Liver Cirrhosis with Esophageal varices and pulmonary hypertension. He was also known case of diabetes since last three years. In his initial assessment, it is recorded that he was a case of ethanol related CID since 10 years. He developed DLA signed the declaration of good health Ex.OP 2,3/2 in English by giving negative answer to questionnaire no.7 of it and concealed the above material fact of above diseases from OP.
8. The forceful submission of counsel for the complainant is that it is not original record and it is not signed by the doctors, hence the same cannot be relied upon at all by the Forum. We have bestowed our careful attention to this submission of counsel for First Appeal No.46 of 2017 10 complainant. We find that it is photostat copy of the record, it is certified as a true copy by OP nos.2 and 3 and record is signed by the doctors, who attended on the patient. On this point, counsel for complainant referred to law laid down in "Smt. Meenu Sahu Vs. Life Insurance Corporation of India & another" 2006(4)Civil LJ- 20 by Allahabad High Court to the effect that no evidence that policy holder was treated for any serious ailment short time before taking of policy. This authority is distinguishable from the fact situation of the case in this case. Similarly, he referred to law laid by UT State Consumer Commission Chandigarh in "Mamta Manu Vs. Life Insurance Corporation of India & others" 2008(1)CPJ-85 that diseased known case of alcoholic liver disease, was a habitual daily drunkard since last 10 years, not disclosed is not acceptable. Death report showing deceased a habitual drunkard since last 10 years not signed by any doctor nor it is proved that he was admitted in any hospital for alcoholic liver disease before issuance of policies. The cited authority is distinguishable from the facts of the case. Herein, it is proved by above medical record of Medanta the Medicity Hospital at Gurgaon, which is a credible medical institute that complainant remained admitted thereat and was a case of Liver Cirrhosis with Esophageal varices, pulmonary Hypertension and diabetes mellitus. The matter is not res-Integra. The National Commission has held in "ICICI Prudential Life Insurane Co. Ltd. & others Vs. Yashika Alias Meera & others" 2015(4)CLT-518/519 that mere photocopy of medical record produced by insurance company. Each of the documents is signed by a doctor. The State Commission opined that First Appeal No.46 of 2017 11 since no affidavit of the doctor was produced, therefore, the case of the petitioner does not stand established. The National Commission held that the case of the OP stands fully proved. A number of medical record written on the paper-head of hospital, cannot be manipulated. The photostat copies of admission card and discharge card bearing the signatures of the doctors and the relatives of the patient. The documents stands proved. We find that the medical record has also been certified to be correct by OP nos.2 and 3 by taking responsibility in that regard and it is duly signed by the treating doctors of DLA. OP nos.2 and 3 obtained it from Medical Record Department of Medanta the Medicity Hospital at Gurgaon. It is not credible that such a renowned institute manipulated the record, which is duly signed by the treating doctors. The medical record has proved that DLA suffered from cirrhosis of liver problem. We rely upon this record, which is photostat copy of the treatment record of the DLA, as it is signed by the treating doctor. Liver cirrhosis does not develop over night and it takes atleast five years for manifestation of its symptoms. Mere submission of complainant that DLA never took any leave from his job and ESI doctor found him suffering from no disorder would not militate against the above record, where DLA remained admitted for his liver disease. The District Forum ignored this material aspect of the case in its order. Even his death certificate issued by Medanta Medicity Hospital has proved alcoholic chronic liver disease and cardiomyopathy. The DLA was found suffering from health disorders, when he entered into the contract of insurance with OPs.
First Appeal No.46 of 2017 12
9. We, thus, find that DLA Prabhjot Singh gave wrong answers deliberately to question no.7 in the proposal form of contract of insurance, which is based on principle of uberimma fides and and whosoever breaches the contract of insurance makes it voidable at the option of the other. The insurance contract is found to be vitiated by misrepresentation and fraud, as the consent of OP nos.2 and 3 has been obtained by DLA by suppressing the material information with regard to his pre-existing ailment of liver cirrhosis. OP nos.2 and 3 are, thus, justified in repudiating the contract of insurance under Section 45 of Insurance Act, 1938, as held by Supreme Court in case titled as "Satwant Kaur Sandhu Vs. New India Assurance Company Ltd." 2009(IV) CPJ-8(SC). Reference be also made to cases titled as "United India Insurance Co. Limited Vs. MKJ Corporation (1996) 6 SCC 428 and "Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd." 2000(2) SCC-734 decided by Apex Court.
10. As a corollary of our above discussion, the order of the District Forum under challenge in this case is erroneous and not sustainable in the eye of law. The order of the District Forum is, thus, reversed. We accept the appeal of the appellant, resultantly the complaint filed by complainant before District Forum stands dismissed.
11. Appellant had deposited an amount of Rs.25,000/- in this Commission at the time of filing the appeal and further deposited Rs.6,98,772/- and Rs.11,228/- in compliance with order of this Commission. These amounts alongwith interest, which accrued First Appeal No.46 of 2017 13 thereon, if any, be remitted by the registry to the appellant by way of crossed cheque/demand draft after expiry of period of 45 days.
12. Arguments in this appeal were heard on 17.07.2017 and the order was reserved. Certified copies of the order be communicated to the parties as per rules.
13. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(J. S. KLAR) PRESIDING JUDICIAL MEMBER (SURINDER PAL KAUR) MEMBER July 20, 2017 MM